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UK-Chinese infrastructure partnerships may create opportunities for law firms

Posted by: Laurence Simons 30/10/14

A law firm's research has suggested infrastructure investment may be a key feature of UK-Chinese co-operation in the next few years.

The UK and China have spent much of the last few years looking to build economic bridges - and that may now involve them constructing some real ones too.

A new report co-authored by law firm Pinsent Masons has suggested that Chinese companies are planning a slew of investments in building across Britain, which will be worth £105 billion between now and 2025.

Among these will be £43.5 billion spent in the energy sector, £36 billion in real estate and £25.5 billion on transport.

The need for lots of money to be spent in these areas is evident enough: Chinese firms are already getting involved in the development of new nuclear power stations, while politicians of all parties are agreed that Britain needs new homes and has to improve its transport infrastructure.

Indeed, the latter sector appears set for another major project after the government confirmed its backing for a third proposed high-speed rail line, this time between Manchester and Leeds.

Pinsent Masons partner Helen Chen said: “Infrastructure will prove to be one of the most attractive classes for Chinese investment into the UK, which follows a very open market approach.”

Law firms may have much to gain from those projects, particularly those with bases in both countries. A lot of co-ordination may be needed as they work through the various regulatory issues involved. The smoothing of legal issues will be something companies who are involved in both countries may be most adept at.

Above all, construction firms will hope they are not held up by red tape, something the current UK government has been making efforts to reduce while running the gauntlet of fearful nimbys and Daily Telegraph cartoonists, but having the right legal support may help get projects off the ground sooner.

The potential for law firms to be involved in UK-China transactions may extend much further than simply the stuff of bricks, mortar, tarmac and rail.

Last month, the government announced the UK will be the first western country to issue bonds in the Chinese currency, the renmibi. This will make it only the fifth overseas currency Britain issues such bonds in, alongside the euro, yen and US and Canadian dollars.